While price movements are the ultimate determinant of market health, assessing relationships between key fundamental measures will give clues as to underlying strength, or weakness. There can be no healthy equities market without an underlying healthy consumer market. Consumption drives demand, which drives production which drives raw materials, which translates into economic growth. During these … Continue reading Relationships Matter
divergence
Internals
Beyond the obvious actions of price and volume, there are also measures of the internal state of the markets that give clues as to long term health and potential trend inflections. Breadth, or the measure of advancing issues versus declining issues can reveal whether a market's present trend is flagging and about to either pause … Continue reading Internals
Early Signs
I've written quite a few times about divergences in momentum and how they can give good clues as to an imminent trend change. The theory is that acceleration will slow down before the actual price change occurs, much like taking the foot off the gas while driving. There are numerous popular indicators which can be … Continue reading Early Signs
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